Payroll Reports: Definition, Types, and Practical Examples

Running a small business means juggling multiple responsibilities every day. Creating payroll reports is a task that seems easy to push down the list. But they’re more important than they might seem.  

Payroll reporting can help you meet tax requirements as well as check payroll accuracy.  

This article breaks down the most common payroll reports, what they’re for, and how you can use them to keep your business running smoothly.

What Is a Payroll Report?

A payroll report is a document that summarizes key information related to employee compensation and employer tax obligations. The reports typically include data such as employee wages, hours worked, pay rates, tax withholdings, benefit contributions, and other deductions.

Payroll reports can serve several important purposes.  

They can help you make sure your employees are paid correctly and on time, that the right amount of taxes is being withheld, and that payroll-related expenses are accurately recorded in your books.  

They also form the foundation for filing required state and federal payroll tax forms.

Some of the most common types of payroll reports include:

• Employee payroll report, which shows individual pay and withholding details.

• Payroll tax liability report, which outlines what your business owes in payroll taxes.

• Monthly or quarterly payroll summaries, which offer a high-level view of payroll activity over time.

Why Payroll Reports Are Critical for Businesses

Payroll reports play a vital role in helping small business owners stay organized, financially informed, and compliant.  

For example, payroll reports provide the data needed to complete required tax forms like W-2, Wage and Tax Statement, 941, Employer’s Quarterly Federal Tax Return, and 940, Employer’s Annual Federal Unemployment Tax (FUTA) Return. They document wages, tax withholdings, and employer tax contributions, which helps you file accurate and timely federal, state, and local tax returns.  

Mistakes or delays in payroll tax filings can result in costly penalties and interest. Keeping detailed, up-to-date reports can help you stay ahead of deadlines and regulatory changes.

What's more, well-organized payroll records help ensure you're following laws and regulations around employee wages, overtime, benefits, and tax obligations. In the event of an audit or employee dispute, payroll reports can serve as a valuable paper trail to show you met your legal responsibilities.

Payroll reporting supports financial planning and forecasting as well.  

Payroll is one of the largest expenses for most small businesses. Reports that outline salaries, bonuses, commissions, overtime, PTO, and benefit costs can help give you a clear picture of total labor expenses.  

With this data, you can analyze cost trends, identify high-spending areas, and forecast future payroll needs based on projected growth or staffing changes.  

Accurate payroll reporting can also play a role in building transparency and trust with employees. The data in payroll reports makes it easier to address employee questions about pay, taxes, or benefits.  

Types of Payroll Reports

Here’s a breakdown of the most common reports, what they include, and how they’re used.  

Payroll Summary Report

A payroll summary report provides an overview of how much was paid to one or more employees over a specific pay period. It typically includes:

• Gross wages

• Tax withholdings

• Employer-paid taxes

• Benefit contributions

• Other deductions

• Net pay

• Payroll totals by employee, department, or pay run

This report can also be useful for reviewing total payroll expenses, comparing costs across departments, preparing tax filings, and conducting internal audits.

Employee Summaries

An employee summary report offers a detailed view of payroll activity for each employee. It breaks down earnings, taxes, and benefit contributions, to give you a complete picture of both the employee’s take-home pay and your total cost as an employer.

This report typically includes:

• Regular and overtime hours worked

• Gross wages

• State and federal tax withholdings

• Employee Social Security and Medicare tax (FICA) deductions

• Employer Social Security and Medicare contributions

• FUTA (Federal Unemployment Tax Act) taxes

• SUTA (State Unemployment Tax Act) taxes

• Employee contributions to benefits (e.g., 401(k), health insurance)

• Employer-paid benefits and matching contributions

Employee summary reports can help you understand the true cost of employing each team member. They’re also useful for year-end reporting, benefits analysis, and financial planning.

Payroll Detail Report

A payroll detail report provides a comprehensive breakdown of all payroll activity for a specific pay period. It provides a line-by-line view of each employee’s compensation, deductions, taxes, and hours worked, essentially functioning as a detailed ledger of payroll transactions.

What’s typically included:

• Employee information (names, employee IDs, departments, and other identifiers for each employee listed)

• Gross wages  

• Net wages  

• Deductions  

• Employer contributions  

• Total regular and overtime hours logged  

• Details of all payroll taxes withheld, including federal income tax, Social Security and Medicare taxes, and applicable state or local taxes.

• Year-to-date (YTD) totals

• Cumulative totals of gross pay, deductions, taxes, and net pay for the current calendar year.

This report can be valuable for double-checking payroll accuracy, preparing audits, managing labor costs, and helping to ensure compliance with tax and wage regulations.

Payroll Tax Liability Reports

A payroll tax liability report outlines the payroll taxes your business owes for a specific period, including the amounts withheld from employees' paychecks and the taxes you, as the employer, are responsible for.  

This typically includes:

• Federal income tax withholdings

• Employee and employer portions of FICA taxes

• FUTA contributions

• SUTA contributions

• Applicable state and local income taxes

This report can help employers remit the correct amounts to federal, state, and local tax agencies on time.

The payroll tax liability report is also useful for preparing and filing required IRS forms, as well as state-specific tax returns. And it serves as supporting documentation for quarterly and annual tax payments.

Paid Time-Off (PTO) Reports

A Paid Time-Off (PTO) report tracks how much paid leave an employee has accrued and used. This typically includes vacation days, sick leave, and personal time.  

A standard PTO report includes:

• Accrued time (the amount of PTO an employee has earned to date)

• Used time (PTO that has already been taken)

• Remaining balance (PTO still available to the employee)

• Leave types (such as vacation, sick leave, or personal time)

PTO reports support several important HR and payroll functions.  

The reports can help prevent leave-related errors, ensure accurate compensation, and maintain compliance with state-mandated PTO regulations.  

For employers, the reports can help with workforce scheduling and planning.  

For employees, access to accurate PTO reports builds transparency and trust by helping them understand and plan their available time off.  

Get tips on how to create a paid time off policy.  

Retirement Contributions

A retirement contribution report provides a detailed record of the funds contributed to employee retirement plans such as 401(k), 403(b), or other employer-sponsored accounts.  

Key components of a retirement contribution report include:

• Employee contributions

• Employer contributions

• Beginning and ending balances for the reporting period

• Total account value

• Investment gains and losses

• Fees and expenses charged to the account

• List of investment options (e.g., mutual funds, ETFs)

• Performance metrics for each investment over the reporting period

• Vested balance (portion of the account that is fully owned by the employee, based on the plan’s vesting schedule)

• Detailed records of contributions, transfers, withdrawals, and distributions

• Designated beneficiaries for the account

• Summary plan description (SPD) outlining plan rules and eligibility

• Required minimum distribution (RMD) details, if applicable

For employers, retirement contribution reports support payroll accuracy, compliance with the Employee Retirement Income Security Act of 1974 (ERISA) and IRS guidelines, and transparency with employees.  

For employees, the reports are important for tracking retirement savings progress, reviewing investment performance, checking for errors, and making informed decisions about future contributions and financial planning.

Workers' Compensation

A workers’ compensation report tracks employee wages and hours worked, organized by job classification, to help businesses calculate and report insurance premiums accurately.  

The report typically includes:

• Total wages paid during the reporting period

• Hours worked, separated by employee and classification

• Workers’ compensation classifications, which assign each employee a code based on job duties and associated risk level

• Premium wages, such as overtime or other forms of additional compensation

• Date range covered by the report

Since workers' compensation rates vary based on the level of risk associated with different job roles, this report plays an important role in determining premium payments. It also helps you to provide accurate payroll data to your workers’ compensation insurance provider.  

Payroll Service Charges

A payroll service charges report provides a detailed breakdown of the fees your business pays to a payroll service provider.  

This report typically itemizes charges such as:

• Payroll processing fees

• Tax filing and remittance fees

• Direct deposit or check printing charges

• Fees for add-on services, like year-end W-2/1099 preparation, benefits administration, or garnishment processing├

Some reports may also capture related payroll costs such as expenses tied to benefits management or workers’ compensation premium calculations, depending on your provider's services.

This report can be used to review monthly or quarterly invoices, identify potential cost-saving opportunities, and correctly record your payroll service expenses in your financial statements.

Key Components of a Payroll Report

To support accurate budgeting and compensation, your reports should include the right data presented clearly and consistently.

Here’s a breakdown of some essential elements found in a comprehensive payroll report.

• Employee information: This includes each employee’s full name, employee ID, and job title. Accurate identification assists in tracking compensation, reporting taxes, and verifying employment history during audits or benefit reviews.

• Pay period and dates: The report should clearly state the start and end dates of the pay period, as well as the payment date. This can support proper alignment with tax filings, accounting records, and employee expectations.

• Gross pay and net pay: Gross pay is the total amount earned before any deductions, including regular wages, overtime, bonuses, or commissions. Net pay is the amount the employee receives after deductions and withholdings. Tracking both is important for understanding true payroll costs.

• Deductions and withholdings: This section lists amounts withheld from employee earnings for federal income tax, state and local income taxes (where applicable), FICA taxes, and other legally required deductions.

• Benefits and contributions: This includes both employee and employer contributions to:

• Health, dental, and vision insurance

• Retirement plans  

• Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs)

• Other voluntary benefits

Examples of Payroll Reports

Unless they’re being audited, businesses aren’t usually required to submit payroll reports to a third party. They are, however, essential to filing certain quarterly and annual tax forms with federal, state, and local governments.

Payroll reports can provide the details needed to accurately complete those filings.

Examples of these government forms include:

Form 941

Form 941 is a required quarterly tax return that employers must file with the IRS. It reports federal income tax withheld from employees’ paychecks, along with both the employer’s and employees’ portions of FICA taxes.

Form 940

The IRS requires employers to file Form 940 to calculate and report their FUTA liability.  

FUTA taxes help fund state unemployment programs that provide temporary financial assistance to workers who have lost their jobs. Employees do not contribute to FUTA; employers are responsible for calculating and paying this tax based on employee wages.

Forms W-2 and W-3

Each calendar year, employers are required to issue Form W-2 to each employee and file copies with the IRS and Social Security Administration (SSA). This form summarizes an employee’s total wages, tips, and other compensation, as well as the federal, state, and local taxes withheld from their paycheck throughout the year. It also reports FICA tax payments.

In addition to filing individual W-2 forms, employers must also submit Form W-3, known as the Transmittal of Wage and Tax Statements. This form acts as a cover sheet for the W-2s and provides a consolidated summary of:

• Total wages paid to all employees

• Total FICA wages

• Total taxes withheld

Form 944

Form 944 is designed for small businesses that qualify to report and pay their federal payroll taxes just once a year, rather than quarterly. It covers the same information as Form 941, federal income tax withheld from employees’ paychecks, along with both the employer and employee portions of FICA taxes, but on an annual basis.

This simplified filing option is only available to eligible small employers with a total annual payroll tax liability of $1,000 or less. The IRS must notify a business of its eligibility to use Form 944.

How to Create a Payroll Report

Manually

If you're managing payroll yourself, it’s important to understand the basic steps involved in how to make a payroll report manually. Here’s how to get started.

• Gather employee data and time records: Collect key information for the pay period, such as timecards, hourly rates, salaries, overtime hours, bonuses, and commissions. Using a spreadsheet can help you keep everything organized.

• Calculate gross pay, deductions, and net pay: Determine each employee’s gross earnings. Then subtract deductions such as federal, state, and local income taxes, the employee's share of FICA taxes, insurance premiums, retirement contributions, and wage garnishments to find the net pay.

• Account for employer tax contributions: Don’t forget to calculate your share of payroll taxes, including FICA, unemployment insurance, and other employer-paid benefits like workers' compensation insurance.

• Review for accuracy: Double-check your math and totals.  

• Save or export your report.

Once you’ve calculated everything, you can print or export the spreadsheet for internal use, tax filing, or sharing with employees and accountants.

To make the manual process easier, consider using downloadable payroll report templates. Many are available for free online, and they can help you format your data consistently, save time, and minimize errors. You can also check with a tax advisor or financial professional for guidance.  

With Payroll Software

Payroll automation can help simplify payroll processing tasks. That can mean more time for small business owners to care for their customers and grow their business.    

Payroll automation refers to the use of software or a service, like SurePayroll® by Paychex, to help you manage and process payroll. Automation can minimize the need for manual data entry, which can be both time-consuming and error prone.  

Most online payroll services record and calculate employee paychecks, handle tax payments and deductions, and automate other payroll-related tasks such as compiling payroll reports.  

Read about the 9 benefits of payroll automation.  

Common Payroll Reporting Mistakes to Avoid

Even small payroll mistakes can have big consequences, including frustrated employees, unnecessary business expenses, and compliance issues.  

Here’s a closer look at some of the common payroll reporting errors.

• Misreporting hours or earnings: Accurate payroll begins with accurate data. Errors in tracking employee hours, whether due to manual entry mistakes, outdated systems, or inconsistent timekeeping practices, can lead to incorrect wage calculations. This not only affects employee trust and morale but may also put your business at risk of violating wage and hour laws.  

• Missing tax deadlines: Payroll tax filings and deposits follow strict deadlines, often monthly or quarterly, depending on your business size and structure. Missing a deadline, even unintentionally, can result in costly penalties and interest from the IRS or your state tax agency.

• Forgetting to update employee status: Failing to reflect changes in an employee’s status, such as promotions, pay rate adjustments, benefits enrollment, or termination, can lead to inaccurate payroll reports, incorrect tax filings, or over/underpayments.  

Conclusion

Payroll reports can give small business owners the insights you need to track labor costs, stay on top of tax responsibilities, and make smart decisions about staffing and budgeting. With them, you'll have accurate records on hand if questions come up from employees, accountants, or tax agencies.

But trying to manage it all manually can take up valuable time and increase the risk of costly errors.

That’s where SurePayroll can help. A trusted online payroll provider, SurePayroll supports small businesses nationwide by helping to take the guesswork out of payroll. We can help you handle your small business payroll, including calculating, withholding, filing, and paying the required payroll taxes. That means more time to focus on growing your business and fewer worries about missing a deadline or making a costly mistake.

See how we can help make payroll reporting easier for your small business.

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